BOARD OF BARBER EXAMINERS STATE OF LOUISIANA. As of and For the Period Ended December 31,2004. (With Accountant's Report Thereon)

Transcription

1 3123 5JIK30 BOARD OF STATE OF LOUISIANA As of and For the Period Ended December 31,2004 (With Accountant's Report Thereon) Under provisions of state law, this report is a public document. A copy of the report has been submitted to the entity and other appropriate public officials. The report is available for public inspection at the Baton Rouge office of the Legislative Auditor and, where appropriate, at the office of the parish clerk of court. Release Date 7 ^0106

2 Board of Barber Examiners STATE OF LOUISIANA Annual Financial Statements December 31, 2004 CONTENTS Independent Accountant's Report 1 Independent Accountant's Agreed-Upon Procedures Report 2-3 Summary of Findings of Prior Findings 4 Statements Balance Sheet Statement of Revenues, Expenses, and Changes in Fund Net Assets Statement of Activities (includes Instructions) Statement of Cash Flows Notes to the Financial Statements A. Summary of Significant Accounting Policies B. Budgetary Accounting C. Deposits with Financial Institutions and Investments (Instructions in back) D. Capital Assets E. Inventories F. Restricted Assets G. Leave H. Retirement System I. Post Retirement Health Care and Life Insurance Benefits J. Leases K. Long-Term Liabilities L. Litigation M. Related Party Transactions N. Accounting Changes O. In-Kind Contributions P. Defeased Issues Q. Cooperative Endeavors R. Government-Mandated Nonexchange Transactions (Grants) S. Violations of Finance-Related Legal or Contractual Provisions T. Short-Term Debt U. Disaggregation of Receivable Balances V. Disaggregation of Payable Balances W. Subsequent Events X. Segment Information Y. Due to/due from and Transfers Z. Liabilities Payable from Restricted Assets AA. Prior-Year Restatement of Net Assets Schedules 1 Schedule of Per Diem Paid Board Members 2 Schedule of State Funding 3 Schedules of Long-Term Debt 4 Schedules of Long-Term Debt Amortization 5 Schedule of Current Year Revenue and Expenses - Budgetary Comparison of Current Appropriation - Non GAAP Basis 15 Schedule of Comparison Figures A B C D

3 MICHAEL K. GLOVER Certified Public Accountant Member p F C t ' V E 0 Member American Institute of 9497 Brookline Ave. r r p t C ' ']t '^ *:!! H I Q *? ciety of Louisiana Certified Public Accountants Baton Rouge, Louisiana ^ ' J Ceriifed Public Accountants (225) JUL I 5 AH 10' 5U Independent Accountant's Report Board of Barber Examiners State of Louisiana Baton Rouge, LA I have reviewed the accompanying Division of Administration, Office of Statewide Reporting and Accounting Policy's Annual Fiscal Report (APR) of the business type activities of the Board of Barber Examiners, a component unit of the State of Louisiana, as of and for the year ended December 31, 2004, which collectively comprise the Board of Barber Examiners basic financial statements as listed under statements in the table of contents. These financial statements reported in the APR are the responsibility of the Board of Barber Examiners management. My review was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and applicable standards of Government Auditing Standards issued by the Comptroller General of the United States of America. A review consist principally of inquiries of the Board of Barber Examiners personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, I do not express such an opinion. Based on my review, I am not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with accounting principles generally accepted in the United States of America. In accordance with the Louisiana Governmental Audit Guide and the provisions of state law, I have issued a report, dated June 27, 2005, on the results of our agreed-upon procedures. June 27, 2005

4 MICHAEL K. GLOVER Certified Public Accountant Member Member American Institute of 9497 Brookline Ave. Society of Louisiana Certified Public Accountants Baton Rouge, Louisiana Certified Public Accountants (225) Independent Accountant's Agreed-Upon Procedures Report To the Louisiana State Board of Barber Examiners I have performed the procedures included in the Louisiana Government Audit Guide and enumerated below, which were agreed to by the management of the Louisiana State Board of Barber Examiners and the Legislative Auditor, State of Louisiana, solely to assist the users in evaluating management's assertions about of the Louisiana State Board of Barber Examiners compliance with certain laws and regulations during the year ended December 31, 2004, included in the accompanying Louisiana Attestation Questionnaire. This agreed-upon procedures engagement was performed in accordance with standards established by the American Institute of Certified Public Accountants and applicable standards of Government Auditing Standards. The sufficiency of these procedures is solely the responsibility of the specified users of the report. Consequently, I make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. Public Bid Law 1. Select all expenditures made during the year for material and supplies exceeding $20,000, or public works exceeding $100,000, and determine whether such purchases were made in accordance with LSA-RS 38: (the public bid law) or R.S. 39: :1755 (the state procurement code, whichever is applicable. No expenditures were made during the year for materials or supplies that exceeding $20,000. Code of Ethics for Public Officials and Public Employees 2. Obtain from management a list of the immediate family members of each board member as defined by LSA- RS 42: (the code of ethics), and a list of outside business interests of all board members and employees, as well as their immediate families. Management provided me with the required list including the noted information. 3. Obtain from management a listing of all employees paid during the period under examination. Management provided me with the required list. 4. Determine whether any of those employees included in the listing obtained from management in agreed-upon procedure (3) were also included on the listing obtained from management in agreed-upon procedure (2) as immediate family members. None of the employees included on the list of employees provided by management (in agreed-upon procedure (3)) appeared on the list provided by management in agreed-upon procedure (2). Budgeting 5. Obtained a copy of the legally adopted budget and all amendments. Management provided me with a copy of the original budget. There were no amendments to the budget during the year. 6. Trace the budget adoption and amendments to the minute book. I traced the adoption of the original budget to the minutes of a meeting held on October 10 and 11,2004 which indicated that the budget had been adopted by the commissioners of the Louisianan Board of Barber Examiners with no opposition. No amendments were made to the budget during the year. 7. Compare the revenues and expenditures of the final budget to actual revenues and expenditures to determine if actual revenues failed to meet budgeted revenues by 5% or more or if actual expenditures exceed budgeted amounts by 5% or more. I compared the revenues and expenditures of the final budget to actual revenues and expenditures. Actual revenues and expenditures for the year did not exceed budgeted amounts by more than 5%,

5 Accounting and Reporting 8. Randomly select 6 disbursements made during the period under examination and: (a) trace payments to supporting documentation as to proper amount and payee; I examined supporting documentation for each of the six selected disbursements and found that payment was for the proper amount and made to the correct payee. (b) determine if payments were properly coded to the correct fund and general ledger account; and All of the six payments were properly coded to the correct general ledger account. (c) determine whether payments received approval from proper authorities. Inspection of documentation supporting each of the six selected disbursements indicated approvals from the accountant and the chairman of the Board of Commissioners. Meetings 9. Examine evidence indicating that agendas for meetings recorded in the minute book were posted or advertised as required by LSA-RS 42:1 through 42:13 (the open meetings law). The Louisiana State Board of Barber Examiner is only required to post a notice of each meeting and the accompanying agenda on the door of the Boards office building. Management has asserted that such documents were properly posted and I find evidence supporting such assertion. Debt 10. Examine bank deposits for the period under examination and determine whether any such deposits appear to be proceeds of bank loans, bonds, or like indebtedness. I inspected copies of bank deposit slips for the period under examination and noted no deposits appeared to be proceeds of bank loans, bonds, or like indebtedness. Advances and Bonuses 11. Examine payroll records and minutes for the year to determine whether any payments have been made to employees which may constitute bonuses, advance, or gifts. A reading of the minutes of the Board for the year indicated no approval for the payments noted. I also inspected payroll records for the year and noted no instances which would indicate payments to employees which would constitute bonuses, advances, or gifts. I was not engaged to, and did not, perform an examination, the objective of which would be the expression of an opinion on management's assertions. Accordingly, I do not express such an opinion. Had I performed additional procedures, other matters might have come to our attention that would have been reported to you. This report is intended solely for the use of management of the Louisiana State Board of Barber Examiners and the Legislative Auditor, State of Louisiana, and should not be used by those who have not agreed to the procedures and taken responsibility for the sufficiency of the procedures for their purposes. Under Louisiana Revised Statute 24:513, this report is distributed by the Legislative Auditor as a public document. June 27, 2005

6 BOARD OF SCHEDULE OF PRIOR YEAR AUDIT FINDINGS FOR THE YEAR ENDED DECEMBER 31, 2004 There were no prior year findings.

7 . STATE OF LOUISIANA Annual Financial Statements Fiscal Year Ending December 31, Schedule Number LA STATE BOARD OF Division of Administration Legislative Auditor Office of Statewide Reporting P. O. Box and Accounting Policy Baton Rouge, Louisiana P. O. Box Baton Rouge, Louisiana AFFIDAVIT Personally came and appeared before the undersigned authority, James Adams of Barber Examiners who duly sworn, deposes and says, that the financial statements herewith given present fairly the financial position of Barber Examiners at December 31,2004 and the results of operations for the year then ended in accordance with policies and practices established by the Division of Administration or in accordance with Generally Accepted Accounting Principles as prescribed by the Governmental Accounting Standards Board. Sworn and subscribed before me, this day of, 20. Signature of Agency Official NOTARY PUBLIC Prepared bv: ERICJ. VICKNAIR, Title: CPA Telephone No.: Date: MAY

8 BALANCE SHEET AS OF DECEMBER 31, 2004 ASSETS CURRENT ASSETS Cash and cash eauivalents (Note C11 Investments (Note C21 Receivables (net of allowance for doubtful accountsmnote U) Due from other funds f Note Yl Due from federal Government Inventories Preoavments Notes receivable Other current assets Total current assets NONCURRENT ASSETS: Restricted assets fnote R: Cash Investments Receivables Notes receivable Caoital assets (net of deoreciationwnote D) Land Buildinas and imorovements Machinery and eouidment Infrastructure Construction in oroaress Other noncurrent assets Total noncurrent assets Total assets LIABILITIES CURRENT UABILITIES: Accounts oavable and accruals (Note V) Due to other funds (Note Y} Due to federal Government Deferred revenues Amounts held in custodv for others Other current liabilities Current oortion of lono-term liabilities: Contracts oavable Reimbursement contracts oavable Comoensated absences oavabie (Note Kl Capital lease obiiaations - (Note J^ Notes oavabje Liabilrties oavable from restricted assets (Note Z1 Bonds oavable Other lono-term liabilities Total current liabilities NON-CURRENT LIABILITIES: Contracts oavable Reimbursement contracts oavable ComDensated absences oavable (Note 10 Caoital lease obiiaations (Note J) Notes oavable Liabilities oavable from restricted assets (Note Z) Bonds oavable Other lono-term liabilities Total lono-term liabilities Total liabilities NET ASSETS Invested in caoital assets, net of related debt Restricted for Caoital DTOiects Debt service Unemolovment comoensation Other soecific oumoses Unrestricted Total net assets Total liabilities and net assets The accompanying notes are an integral part of this financial statement. Statement A. 1?74fifl 1?74fiR Qfifl ?444 fir 77.S Bfl4S 1 3 fi? R75

9 STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 2004 OPERATING REVENUES Sales of commodities and services Assessments Use of money and property Licenses, permits, and fees Other Total operating revenues OPERATING EXPENSES Cost of sales and services Administrative Depreciation Amortization Total operating expenses Operating income(loss) NON-OPERATING REVENUES(EXPENSES) State appropriations Intergovernmental revenues (expenses) Taxes Use of money and property Gain (loss) on disposal of fixed assets Federal grants Interest expense Other Total non-operating revenues (expenses) Income(loss) before contributions and transfers , , (21.499) 2,003 2,003 (19.496) Capital contributions Transfers in Transfers out Change in net assets Total net assets - beginning as restated Total net assets - ending (19.496) B7B The accompanying notes are an integral part of this financial statement. Statement B

10 STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2004 Program Revenues Net (Expense) Operating Capital Revenue and Charges for Grants and Grants and Changes in Expenses Services Contributions Contributions Net Assets $ 361,502 $ 340,003 $ (21,499) General revenues: Taxes State appropriations Grants and contributions not restricted to specific programs Interest Miscellaneous Special items Transfers Total general revenues, special items, and transfers Change in net assets Net assets - beginning Net assets - ending 2,003 2,003 (19.496) Statement C

11 STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2004 Cash flows from operating activities Cash received from customers $ 364,143 Cash payments to suppliers for goods and services ( ) Cash payments to employees for services (176,200) Payments in lieu of taxes Internal activity-payments to other funds Claims paid to outsiders Other operating revenues(expenses) Net cash provided (used) by operating activities (882) Cash flows from non-capital financing activities State appropriations Proceeds from sale of bonds Principal paid on bonds Interest paid on bond maturities Proceeds from issuance of notes payable Principal paid on notes payable Interest paid on notes payable Operating grants received Other Transfers In Transfers Out Net cash provided (used) by non-capital financing activities Cash flows from capital and related financing Proceeds from sale of bonds Principal paid on bonds Interest paid on bond maturities Proceeds from issuance of notes payable Principal paid on notes payable Interest paid on notes payable Acquisition/construction of capital assets Proceeds from sale of capital assets Capital contributions Other Net cash provided(used) by capital and related financing activities ^_ -_ Cash flows from Investing activities Purchases of investment securities Proceeds from sale of investment securities Interest and dividends earned on investment securities 2,003 Net cash provided(used) by investing activities 2,003 Net increase(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year 126,347 Cash and cash equivalents at end of year $ The accompanying notes are an integral part of this statement. Statement D

12 STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2004 Reconciliation of operating Income(loss) to net cash provlded(used) by operating activities: Operating income(loss) $ (21.499) Adjustments to reconcile operating income(loss) to net cash Depreciation/amortization 428 Provision for uncollectible accounts Changes in assets and liabilities:, (Increase)decrease in accounts receivable, net (Increase)decrease in due from other funds (Increase)decrease in prepayments (Increase)decrease in inventories (Increase)decrease in other assets Increase(decrease) in accounts pavable and accruals (2.414) Increase(decrease) in accrued payroll and related benefits Increase(decrease) in compensated absences payable (615) Increase(decrease) in due to other funds Increase(decrease) in deferred revenues 22,040 Increase(decrease) in other liabilities, Net cash provided(used) bv operating activities Schedule of noncash Investing, capital, and financing activities: Borrowing under capital lease Contributions of fixed assets Purchases of equipment on account Asset trade-ins Other (specify) Total noncash Investing, capital, and financing activities: (Concluded) The accompanying notes are an integral part of this statement. Statement D

13 Notes to the Financial Statement As of and for the year ended December 31,2004 INTRODUCTION The Barber Examiners was created by the Louisiana State Legislature under the provisions of Louisiana Revised Statute 37: The following is a brief description of the operations of Barber Examiners. A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 1. BASIS OF ACCOUNTING In April of 1984, the Financial Accounting Foundation established the Governmental Accounting Standards Board {GASB) to promulgate generally accepted accounting principles and reporting standards with respect to activities and transactions of state and local governmental entities. The GASB has issued a Codification of Governmental Accounting and Financial Reporting Standards (GASB Codification). This codification and subsequent GASB pronouncements are recognized as generally accepted accounting principles for state and local governments. The accompanying financial statements have been prepared in accordance with such principles. The accompanying financial statements of Barber Examiners present information only as to the transactions of the programs of the Barber Examiners as authorized by Louisiana statutes and administrative regulations. Basis of accounting refers to when revenues and expenses are recognized and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. The accounts of the Barber Examiners are maintained in accordance with applicable statutory provisions and the regulations of the Division of Administration - Office of Statewide Reporting and Accounting Policy as follows: Revenue Recognition Revenues are recognized using the full accrual basis of accounting; therefore, revenues are recognized in the accounting period in which they are earned and become measurable. License fees collected in advance are reported on the statement of net assets as deferred revenues. Expense Recognition Expenses are recognized on the accrual basis; therefore, expenses, including salaries, are recognized in the period incurred, if measurable. B. BUDGETARY ACCOUNTING The appropriations made for the operations of the various programs of the Barber Examiners are annual lapsing appropriations. 1. The budgetary process is an annual appropriation valid for one year. 2. The agency is prohibited by statute from over expending the categories established in the budget. 3. Budget revisions are granted by the Joint Legislative Budget Committee, a committee of the Louisiana Legislature. Interim emergency appropriations may be granted by the Interim Emergency Board. 4. The budgetary information included in the financial statements include the original appropriation plus subsequent amendments as follows:

14 Notes to the Financial Statement As of and for the year ended December 31, 2004 APPROPRIATIONS Original approved budget $ 358,951 Amendments: Final approved budget $ C. DEPOSITS WITH FINANCIAL INSTITUTIONS AND INVESTMENTS (If all agency cash and investments are deposited in the State Treasury, disregard Note C.) 1. DEPOSITS WITH FINANCIAL INSTITUTIONS For reporting purposes, deposits with financial institutions include savings, demand deposits, time deposits, and certificates of deposit. Under state law the Barber Examiners may deposit funds within a fiscal agent bank selected and designated by the Interim Emergency Board. Further, the Barber Examiners may invest in time certificates of deposit of state banks organized under the laws of Louisiana, national banks having their principal office in the state of Louisiana, savings accounts or shares of savings and loan associations and savings banks, and share accounts and share certificate accounts of federally or state chartered credit unions. For the purpose of the Statement of Cash Flows, all highly liquid investments (including restricted assets with a maturity of three months or less when purchased) are considered to be cash equivalents. Deposits in bank accounts are stated at cost, which approximates market. Under state law these deposits must be secured by federal deposit insurance or the pledge of securities owned by the fiscal agent bank. The market value of the pledged securities plus the federal deposit insurance must at all times equal the amount on deposit with the fiscal agent. These pledged securities are held in the name of the pledging fiscal agent bank in a holding or custodial bank in the form of safekeeping receipts held by the State Treasurer, Following the issuance of GASB Statement 3, deposits were classified into three categories of custodial credit risk depending on whether they were insured or collateralized, and who held the collateral and how it was held. Category 1 - Deposits that are covered by insurance (FDIC) or collateralized with securities that are held by the entity in the entity's name or registered in the entity's name, (separate disclosure no longer required) Category 2 - Deposits that are not insured but are collateralized with securities that are held by the financial institution's trust department or agent and are in the entity's name, (separate disclosure no longer required) Category 3 - Deposits that are not covered by insurance and also are not collateralized. Not collateralized includes when the securities (collateral) are held by the financial institution's trust department or agent and they are not in the entity's name, (separate disclosure still required) GASB Statement 40 only requires category 3 deposits to be disclosed in the custodial credit risk section of Note C. If an entity has deposits exposed to custodial credit risk category 3, It should disclose the amount of those balances, the fact that they are uninsured, and whether the balances are either uncollaterallzed, collateralized with securities held by the pledging financial Institution,

15 Notes to the Financial Statement As of and for the year ended December 31, 2004 or collaterallzed with securities held by the pledging financial Institution's trust department or agent, but not In the entity's name. The deposits at December 31, 2004, consisted of the following: Certificates Other Cash of pppn-sit (Describe) Total Deposits in bank accounts per balance sheet $ 29,418 $ 98,050 $ $ Bank balances (category 3 only, If any) Identify amounts reported as category 3 by the descriptions below: a. Uninsured and uncollateralized ; b. Uninsured and col late ralized with securities held by the pledging institution - c. Uninsured and collateralized with securities held held by the pledging institution's trust department or agent but n t in *^g entities ngrne Total Category 3 bank balances $ - $ Total bank balances (All categories Including category 3 reported above) $ 51,167 $ 98,050 $ == $ 149,217 NOTE: The "Total Bank Balances" will not necessarily equal the "Deposits in Bank Account per Balance Sheet". The following is a breakdown by banking institution, program, account number, and amount of the balances shown above: pgni"ng4dstitulion P r ojram Amount 1. Union Planters _ Checking _ $ 47, Barbers Credit Union 3..Resource Bank 4. Various Savings Savinas TCD's 324 3,355 98,050 Total $ Cash in State Treasury and petty cash are not required to be reported in the note disclosure. However, to aid in reconciling amounts reported on the Balance Sheet to amounts reported in this note, list below any cash in treasury and petty cash that are included on the Balance Sheet. 2. INVESTMENTS Cash in State Treasury $ Petty cash $ ^ The Barber Examiners does not maintain investment accounts as authorized by law.

16 Notes to the Financial Statement As of and for the year ended December 31, 2004 Investments can be classified according to the level of risk to the entity. Using the following categories, list each type of investment disclosing the carrying amount, market value, and applicable category of risk. Beginning with fiscal year ending June 30, 2004, only risk category 3 has to be broken out separately. However, the total reported amount and fair value columns still must be reported for total Investments (Including category 3). Category 1 - Insured or registered in the entity's name, or securities held by the entity or its agent in the entity's name, (separate disclosure no longer required) Category 2 - Uninsured and unregistered with securities held by the counterparty's trust department or agent in the entity's name, (separate disclosure no longer required) Category 3 - Unsecured and unregistered with securities held by the counterparty, or by its trust department or agent but not in the entity's name, (separate disclosure still required) NOTE: GASB Statement 40 requires Investments to be listed by type, and whether any of those are category 3 Investments. If so, those category 3 Investments are reported in one of two separate columns depending upon whether they are held by a counterparty, or held by a counterparty's trust department or agent not in the entity's name. Amount Reported In Risk Category 3, If Any: Held by Total Reported Total Fair Counterpart/s Amount - All Value - All Trust Dept or Categories Categories Held by Agent Not In (Including (Including Tvoe of Investment Counterparty Entity's Name Category 31 Category 31 Repurchase agreements $ $ $ $ U.S. Government securities Common & preferred stock Commercial paper Corporate bonds Other: (identify) Total investments $ The' institution does/does not (circle one) invest in derivatives as part of its investment policy. Accordingly, the exposure to risks from these investments is as follows: credit risk market risk ; legal risk

17 Notes to the Financial Statement As of and for the year ended December 31, Other Disclosures Required for Investments a. Investments in pools managed by other governments or mutual funds_ b. Securities underlying reverse repurchase agreements. c. Unrealized investment losses d. Commitments as of (fiscal close), to resell securities under yield maintenance repurchase agreements: 1. Carrying amount and market value at June 30 of securities to be resold 2. Description of the terms of the agreement e. Losses during the year due to default by counterparties to deposit or investment transactions f. Amounts recovered from prior-period losses which are not shown separately on the balance sheet Legal or Contractual Provisions for Reverse Repurchase Agreements g. Source of legal or contractual authorization for use of reverse repurchase agreements h. Significant violations of legal or contractual provisions for reverse repurchase agreements that occurred during the year Reverse Repurchase Agreements at Year-End i. Credit risk related to the reverse repurchase agreements outstanding at balance sheet date, that is, the aggregate amount of reverse repurchase agreement obligations including accrued interest compared to aggregate market value of the securities underlying those agreements including interest j. Commitments on (fiscal close), to repurchase securities under yield maintenance agreements k. Market value on (fiscal close), of the securities to be repurchased I. Description of the terms of the agreements to repurchase m. Losses recognized during the year due to default by counterparties to reverse repurchase agreements

18 Notes to the Financial Statement As of and for the year ended December 31, 2004 n. Amounts recovered from prior-period losses which are not separately shown on the operating statement ^ Fair Value Disclosures o. Methods and significant assumptions used to estimate fair value of investments, if fair value is not based on quoted market prices p. Basis for determining which investments, if any, are reported at amortized cost q. For investments in external investment pools that are not SEC-registered, a brief description of any regulatory oversight for the pool r. Whether the fair value of your investment in the external investment pool is the same as the value of the pool shares s. Any involuntary participation in an external investment pool t Whether you are unable to obtain information from a pool sponsor to determine the fair value of your investment in the pool, methods used and significant assumptions made in determining that fair value and the reasons for having had to make such an estimate u. Any income from investments associated with one fund that is assigned to another fund_ Credit Risk. Concentration of Credit Risk, interest Rate Risk, and Foreign Currency Risk Disclosures v. Briefly describe the deposit and/or investment policies related to the custodial credit risk, concentration of credit risk, Interest rate risk, and foreign currency risk disclosed In this note. If no policy exists concerning the risks disclosed, please state that fact. w. List, by amount and Issuer (not Including U.S. government securities, mutual funds, and investment pools), Investments In any one Issuer that represents 5% or more of total investments _^_ x. List the fair value and terms of any debt investments that re highly sensitive to changes In interest rates due to the terms of the Investment (eg. coupon multipliers, reset dates, etc.) y. Disclose the credit risk of debt investments by credit quality ratings as described by rating agencies as of the fiscal year end. All debt Investments regardless of type can be aggregated by credit quality rating (If any are unrated, disclose that amount). z. Disclose the Interest rate risk of debt Investments by listing the Investment type and the method that is used to identify and manage the Interest rate risk of those Investments (by one of the following 5 methods: a) segmented time distribution, b) specific identification, c) weighted average maturity, d) duration, or e) simulation model.)

19 Notes to the Financial Statement As of and for the year ended December 31, 2004 aa. Disclose the U.S. dollar balances of any deposits or investments that are exposed to foreign currency risk (deposits or Investments denominated In foreign currencies). List by currency denomination and Investment type, If applicable. D. CAPITAL ASSETS-INCLUDING CAPITAL LEASE ASSETS The fixed assets used in the Special Purpose Government Engaged only in Business-Type Activities are included on the balance sheet of the entity and are capitalized at cost. Depreciation of all exhaustible fixed assets used by the entity are charged as an expense against operations. Accumulated depreciation is reported on the balance sheet. Depreciation for financial reporting purposes is computed by the straight-line method over the useful lives of the assets. Year ended December 31^2004 Prior Adjusted Balance Period Balance Balance 12/31/2003 Adjustment 12/31/2003 Additions Transfers' Retirements 12/31/2004 Capital assets not being depreciated Land Non-depreciable land improvements - - Capitalized collections Construction in progress - - Total capital assets not being depreciated Other capital assets Furniture, fixtures, and equipment 10,276 10,276 10,276 Less accumulated depreciation 8.527,527 4g8 8J)55 Total furniture, fixtures, and equipment = (428) = = Buildings and improvements Less accumulated depreciation ~ - Total buildings and improvements = _. Depreciable land improvements Less accumulated depreciation Total depreciable land improvements Infrastructure Less accumulated depreciation Total infrastructure Total other capital assets _ J428) r_.^ - "L321_ Capital Asset Summary: Capital assets not being depreciated Other capital assets, at cost =_ 10,276 « ^ Total cost of capital assets 10,276-10,276-10,276 Less accumulated depreciation j ,955 Capital assets, net (4281 1,321 * Should be used only for those completed projects coming out of construct ion-in-prog ress to fixed assets; not associated with transfers reported elsewhere in this packet.

20 Notes to the Financial Statement As of and for the year ended December 31, 2004 E. INVENTORIES N/A The unit's inventories are valued at (method of valuation). These are perpetual inventories and are expensed when used. NOTE: Do not Include postage. This must be shown as a prepayment. F. RESTRICTED ASSETS N/A Restricted assets in the Barber Examiners at (fiscal year end), reflected at $ in the non-current assets section on Statement A, consist of $ in cash with fiscal agent, $ in receivables, and $ investment in (identify the type investments held.) State the purpose of the restriction: G. LEAVE 1. COMPENSATED ABSENCES The Barber Examiners has the following policy on annual and sick leave: Employees earn and accumulate annual and sick leave at various rates depending on their years of service. The amount of annual and sick leave that may be accumulated by each employee is unlimited. Upon termination, employees or their heirs are compensated for up to 300 hours of unused annual leave at the employee's hourly rate of pay at the time of termination. Upon retirement, unused annual leave in excess of 300 hours plus unused sick leave is used to compute retirement benefits. The cost of leave privileges, computed in accordance with GASB Codification Section C60, is recognized as a current year expenditure in the fund when leave is actually taken; it is recognized in the enterprise funds when the leave is earned. The cost of leave privileges applicable to general government operations not requiring current resources is recorded in long-term obligations. 2. COMPENSATORY LEAVE Employees who are considered having non-exempt status according to the guidelines contained in the Fair Labor Standards Act may be paid for compensatory leave earned (K-time). Upon termination or transfer, an employee will be paid for any time and one-half compensatory leave earned and may or may not be paid for any straight hour-for-hour compensatory leave earned. Compensation paid will be based on the employees' hourly rate of pay at termination or transfer. The liability for accrued payable compensatory leave at December 31, 2004 computed in accordance with the Codification of Governmental Accounting and Financial Reporting Standards, Section C is estimated to be $0. H. RETIREMENT SYSTEM Substantially all of the employees of the Barber Examiners are members of the LASERS (System), a cost sharing multiple-employer, defined benefit pension plan. The System is a statewide public employee retirement system (PERS) for the benefit of state employees, which is administered and controlled by a separate board of trustees. All full-time Barber Examiners employees are eligible to participate in the System. Benefits vest with 10 years of service. At retirement age, employees are entitled to annual benefits equal to $300 plus 2.5% of their highest consecutive 36 months' average salary multiplied by their years of credited service.

21 Notes to the Financial Statement As of and for the year ended December 31,2004 Vested employees are entitled to a retirement benefit, payable monthly for life at (a) any age with 30 years of service, (b) age 55 with 25 years of service, or (c) age 60 with 10 years of service. In addition, vested employees have the option of reduced benefits at any age with 20 years of service. The System also provides death and disability benefits. Benefits are established or amended by state statute. The System issues an annual publicly available financial report that includes financial statements and required supplementary information for the System. That report may be obtained by writing to the State Employees Retirement System, Post Office Box 44213, Baton Rouge, Louisiana , or by calling (225) or (800) Members are required by state statute to contribute 7.5% of gross salary, and the Barber Examiners is required to contribute at an actuarially determined rate as required by R.S. 11:102. The contribution rate for the fiscal year ended December 31, 2004, increased to 19.1% of annual covered payroll from the 15.8% and 14.1% required in fiscal years ended December 31, 2003 and 2002, respectively. The Barber Examiners contributions to the System for the years ending December 31, 2004, 2003, and 2002, were $22,838, $16,424, and $10,640, respectively, equal to the required contributions for each year. I. POST RETIREMENT HEALTH CARE AND LIFE INSURANCE BENEFITS GASB 12 requires the following disclosures about an employer's accounting for post retirement health care and life insurance benefits: 1. A description of the benefits provided and the employee group covered. 2. A description of the accounting and funding policies followed for those benefits. 3. The cost of those benefits recognized for the period, unless the costs are not readily determinable,** 4. The effect of significant matters affecting the comparability of the costs recognized for all periods presented. **lf the cost of any post retirement health care or life insurance benefits cannot readily be separated from the cost of providing such benefits for active employees or otherwise be reasonably approximated, the total cost of providing those benefits to active employees and retirees, as well as the number of active employees and the number of retirees covered by the plan must be disclosed. Substantially all Barber Examiners' employees become eligible for post employment health care, dental and life insurance benefits if they reach normal retirement age while working for the Barber Examiners. These benefits for retirees and similar benefits for active employees are provided through an insurance company whose premiums are paid jointly by the employee and the Barber Examiners. For 2004, the cost of providing those benefits for the retirees totaled $ 9,718. The Barber Examiners provides certain continuing health care and life insurance benefits for its retired employees. Substantially all Barber Examiners employees become eligible for those benefits if they reach normal retirement age while working for the Barber Examiners. Those benefits for retirees and similar benefits for active employees are provided through an insurance company whose monthly premiums are paid jointly by the employee and by the Barber Examiners. The Barber Examiners recognizes the cost of providing these benefits (Barber Examiner's portion of premiums) as an expenditure when paid during the year, which was $9,718 for the year ended December 31, 2004.

22 m STATE OF LOUISIANA Notes to the Financial Statement As of and for the year ended December 31, 2004 J. LEASES 1. OPERATING LEASES The total payments for operating leases during fiscal year 2004 amounted to $20,787. A schedule of payments for operating (eases follows: FY2010- FY2015- Office Space $ $ $ $ Equipment _ Total $ 19,932 $ $ $ - $, - $ - $ 2. CAPITAL LEASES N/A Capital leases are (are not) recognized in the accompanying financial statements. The amounts to be accrued for capital leases and the disclosures required for capital and operating leases by National Council on Governmental Accounting (NCGA) Statement No. 5, as adopted by the Governmental Accounting Standards Board, and FASB 13 should be reported on the following schedules: Capital leases are defined as an arrangement in which any one of the following conditions apply: (I) ownership transfers by the end of the lease, (2) the lease contains a bargain purchase option, (3) the lease term is 75% of the asset life or, (4) the discounted minimum lease payments are 90% of the fair market value of the asset. SCHEDULE A - TOTAL AGENCY CAPITAL LEASES EXCEPT LEAF Remaining Remaining Gross Amount of interest to principal to Leased Asset end of end of Nature of lease (Historical Costs) lease lease a. Office space $ $ $ b. Equipment c. Land Total $ - $ $ The following is a schedule by years of future minimum lease payments under capital leases together with the present value of the net minimum lease payments as of (last day of your fiscal year) and a breakdown of yearly principal and interest:

23 11 STATE OF LOUISIANA Notes to the Financial Statement As of and for the year ended December 31, 2004 Year ending June 30: Total 2005 $ Total minimum lease payments Less amounts representing executory costs Net minimum lease payments Less amounts representing interest Present value of net minimum lease payments $ SCHEDULE B - NEW AGENCY CAPITAL LEASES EXCEPT LEAF Remaining Remaining Gross Amount of interest to principal to Leased Asset end of end of Nature of lease (Historical Costs) lease lease a. Office space $ S $ b. Equipment c. Land Total $ $ - $ The following is a schedule by years of future minimum lease payments under capital leases together with the present value of the net minimum lease payments as of (last day of your fiscal year) and a breakdown of yearly principal and interest: Year ending June 30: Total 2005 $ Total minimum lease payments -_ Less amounts representing executory costs Net minimum lease payments - Less amounts representing interest Present value of net minimum lease payments $

24 Notes to the Financial Statement As of and for the year ended December 31,2004 SCHEDULE C - LEAF CAPITAL LEASES Remaining Remaining Gross Amount of interest to principal to Leased Asset end of end of Nature of lease (Historical Costs) lease lease a. Office space $ $ $ b. Equipment c. Land Total $ - $ - $ - The following is a schedule by years of future minimum lease payments under capital leases together with the present value of the net minimum lease payments as of (last day of your fiscal year) and a breakdown of yearly principal and interest: Year ending June 30: Total 2005 $ Total minimum lease payments - Less amounts representing executory costs Net minimum lease payments - Less amounts representing interest Present value of net minimum lease payments $ 3. LESSOR DIRECT FINANCING LEASES N/A A lease is classified as a direct financing lease (1) when any one of the four capitalization criteria used to define a capital lease for the lessee is met and (2) when both the following criteria are satisfied: Collectibiltty of the minimum lease payments is reasonably predictable. No important uncertainties surround the amount of the unreimbursable costs yet to be incurred by the lessor under the lease. 12

25 13 STATE OF LOUISIANA Notes to the Financial Statement As of and for the year ended December 31, 2004 Provide a general description of the direct financing agreement, and complete the chart below: a. Office space $ $ $ b. Equipment c. Land Less amounts representing executory costs Minimum lease payment receivable Less allowance for doubtful accounts Net minimum lease payments receivable Less: Estimated Residual Value of Leased Property Less unearned income Net investment in direct financing lease Minimum lease payments do not include contingent rentals which may be received as stipulated in the lease contracts. Contingent rental payments occur if for example the use of the equipment, land, or building etc., exceeds a certain level of activity each year. Contingent rentals received for fiscal year 2004 were $ for office space, $ for equipment, and $ for land. The following is a schedule by year of minimum leases receivable for the remaining fiscal years of the lease as of (the last day of your fiscal year): Year ending : 2005, $ Total $ 4. LESSOR - OPERATING LEASE N/A When a lease agreement does not satisfy at least one of the four criteria (common to both lessee and lessor accounting), and both of the criteria for a lessor (collectibility and no uncertain reimbursable costs), the lease is classified as an operating lease. In an operating lease, there is no simulated sale and the lessor simply records rent revenues as they become measurable and available.

26 Notes to the Financial Statement As of and for the year ended December 31, 2004 Provide the cost and carrying amount, if different, of property on lease or held for lease organized by major class of property and the amount of accumulated depreciation as of 20 : a. Office space b. Equipment c. Land Total Cost Accumulated depreciation $ $ $ 3" Carrying amount The following is a schedule by years of minimum future rentals on non-cancelable operating lease(s) as of (the last day of your fiscal year): Year Ended June 30, Office Space Equipment Land Other 2005 $ $ $ $ $ Total _ - - Totaf - $ - $ - $ Current year lease revenues received in fiscal year totaled $ Contingent rentals received from operating leases received for your fiscal year was $_ for office space, $_ for equipment, and $ for land. K. LONG-TERM LIABILITIES The following is a summary of long-term debt transactions of the entity for the year ended December 31, 2004; Bonds and notes payable: Notes payable Reimbursement contracts payable Bonds payable Total notes and bonds Other liabilities: Contracts payable Compensated absences payable Capital lease obligations Liabilities payable from restricted assets Claims and litigation Other long-term liabilities Total other liabilities Balance December 31, 9, Ypar pnrioh Hopomhor 31 9nn/i Additions. P«aHiirtinng Balance December 31, 615 8, Amounts due within Total long-term liabilities 9, ,845 14

27 15 STATE OF LOUISIANA Notes to the Financial Statement As of and for the year ended December 31, 2004 A detailed summary, by issues, of a!! debt outstanding at June 30, 20, including outstanding interest of $ is shown on schedule 4. Schedule 5 is an amortization schedule of the outstanding debt. (Send OSRAP a copy of the amortization schedule for any new debt issued.) L. LITIGATION N/A 1. The Barber Examiners is a defendant in litigation seeking damages as follows: Date of Action Description of Litigation and Probable outcome (remote, reasonably possible or probable) Primary Attorney Damages Claimed Insurance Coverage Totals $ The Barber Examiners's legal advisor estimates that potential claims not covered by insurance would affect the financial statement as follows (would not materially affect the financial statements or is unable to estimate the effect on the financial statement): 2. Claims and litigation costs of $ _ the accompanying financial statement. were incurred in the current year and are reflected in M. RELATED PARTY TRANSACTIONS N/A (FASB 57 requires disclosure of the description of the relationship, the transaction(s), the dollar amount of the transaction(s) and any amounts due to or from which result from related party transactions. List all related party transactions). N. ACCOUNTING CHANGES N/A Accounting changes made during the year involved a change in accounting estimate, error or entity). The effect of the change is being shown in (principle, O. IN-KIND CONTRIBUTIONS N/A

28 16 STATE OF LOUISIANA Notes to the Financial Statement As of and for the year ended December 31, 2004 (List all in-kind contributions that are not included in the accompanying financial statements.) In-Kind Contributions Cost/Estimated Cost/Fair Market Value/As Determined bv the Grantor Total P. DEFEASED ISSUES N/A In, 20, the Barber Examiners, issued $ of taxable bonds. The purpose of the issue was to provide monies to advance refund portions of bonds. In order to refund the bonds, portions of the proceeds of the new issue $, plus an additional $ of sinking fund monies together with certain other funds and/or securities, were deposited and held in an escrow fund created pursuant to an escrow deposit agreement dated, between the Barber Examiners and the escrow trustee. The amount in the escrow, together with interest earnings, will be used to pay the principal, redemption premium, and interest when due. The refunding resulted in reducing the total debt service payments by almost $ and gave the Barber Examiners an economic gain (difference between the present values of the debt service payments on the old and new debt of $. Q. COOPERATIVE ENDEAVORS N/A LRS 33:9022 defines cooperative endeavors as any form of economic development assistance between and among the state of Louisiana, its local governmental subdivisions, political corporations, public benefit corporations, the United States government or its agencies, or any public or private association, corporation, or individual. The term cooperative endeavor includes cooperative financing, cooperative development, or any form of cooperative economic development activity. The state of Louisiana has entered into cooperative endeavor agreements with certain entities aimed at developing the economy of the state. Some cooperative endeavor contracts are not coded with a document type of "COP" on the Contract Financial Management Subsystem (CFMS), but are considered cooperative endeavors. Include these below with your cooperative endeavor contracts coded with a document type of "COP". Examples of contracts that are considered cooperative endeavors, but are not coded with a document type of "COP" Include contracts that fall under delegated authority, Facility Planning and Control "CEA" contracts, certain federal government contracts, contracts that legislative auditors may have designated as such within your agency, work Incumbent programs, etc. In prior years, this Information was requested as supplemental documentation after the AFRs were submitted, usually In October or November. The liability outstanding as of December 31, 2004, by funding source, is as follows: